Fight To Run UK Lotto Ain’t Over Until The ex-Porn King Sings

Czech mate. Anyone who thinks that the long running chess game over the fate of the UK Lottery has finally been settled in favour of Czech operator Allwyn will have to blink again.

For Northern & Shell–one of the losing finalists in last year’s licensing run-off and a company owned by ex-porn king and former media baron turned property tycoon Richard Desmond–-is now seeking £200 million (US$244.97m) in damages from the regulatory UK Gambling Commission (UKGC), claiming that the secretive auction process was “seriously flawed”.

Last September Allwyn–owned by Czech billionaire Karel Komárek–was awarded the Fourth Licence to operate the National Lottery for a decade, starting from February 1 next year.

The decision was met with howls of outrage from all the other bidders, not least incumbents Camelot, who have run the UK lottery since its inception in 1994.

Camelot, then owned by the Canadian Ontario Teachers’ Pension Fund, cried foul and threatened legal action against Allwyn and, by extension, the gambling commissioners.

Allwyn dealt with the legal threat by the simple expedient of buying Camelot outright.

But now Desmond, founder and principal shareholder of holding company Northern & Shell, which once owned Channel 5 television, and the Daily Express, Sunday Express and Daily Star, amongst other newspaper titles, is seeking £200 million in damages from the UKGC, revealed a source close to the process.

Nowhere To Run

Desmond first established his publishing reputation and built his fortune by becoming the UK licensee of Penthouse magazine, expanding to titles like Asian Babes and Posh Housewives, then launching OK! magazine, before buying Express Newspapers in 2000.

Northern & Shell has since divested its media interests and mutated into a property empire.

The company has also run the Health Lottery in Britain since 2011, raising some £130 million (US$159.23m) for 3,400 local health projects across the nation.

Referring to the UK Lottery bidding process, Desmond told the Financial Times: “We didn’t think the process was fair. Allwyn has no experience in the UK.

“Our bid would have ensured support for British people and charities. We’re British. We’re here. [For us] there’s nowhere to run. We wanted to do it better. We wanted to raise more money for charitable causes.”

Allwyn, meantime, has conceded that for at least two years the company will raise less money for good causes than initially projected in their UK Lottery licensing pitch.

But they insisted that they will still hit their stated target to raise £38 billion (US$46.54bn) for charities across the 10-year licensing period.

A spokesperson for the UKGC told iGamingFuture:

“We are confident that we ran a fair and robust competition.

“We took every step possible to ensure a level playing field for all interested parties, to enable us to appoint a licensee who will engage and protect players, run the National Lottery with integrity and ensure the National Lottery continues to support good causes and their contribution to society.

“We received four applications at the final stage. This is the highest number of applications since the first National Lottery licence was awarded in 1994.”